SB 9

What is the total amount of the expenses that will be shown on the Cash Disbursement budget for the year?

$89,000

A detailed plan, expressed in quantitative terms that specifies what resources will be acquired and used during a specified period of time is a(n)

budget

The most obvious purpose of a(n)___is to quantify a plan of action.

budget

Including costs in a budget for unexpected occurrences is an example of ______.

budgetary slack

Providing incentives for accurate budget projections is a way to avoid ______.

budgetary slack

Pro forma financial statements is another term for___financial statements.

budgeted

The budged cost of goods manufactured schedule calculates the ______.

budgeted cost of goods completed and transferred to budgeted finished goods inventory

The final portion of the master budget is the preparation of the ______.

budgeted financial statements

A plan for the acquisition of fixed assets is a ______ budget.

capital

The budgeted income statement shows all of the following except budgeted ______.

cash

Trends and events that will require long-term capital acquisition through debt or equity are identified on the___budget.

cash

A company's financial position is summarized on the

cash budget

The budget that reflects the time period in which company expects to collect on its sales is the ______ budget.

cash receipts

A master budget does all of the following except ______.

choose the supplier of the resources required to accomplish the plans

Pulling together the plans of all the organization's managers is the purpose of ______.

communication and coordination

The resources needed to turn purchased inputs into a marketable product or service are called

conversion cost

Only a manufacturing firm includes a budgeted schedule of ______.

cost of goods manufactured

Which of the following would not be found on the cash disbursement budget?

depreciation expense

FASB recommends using the

direct

Whitewater Wine Foundation expects 125,000 attendees at their May festival. Wine-tasters pay a $10 entrance fee which includes a tasting glass and wine-tasting wristband. Designated drivers pay a $5 entrance fee and receive a ticket for one non-alcoholic drink. Of the attendees, 10% are expected to be designated drivers. Costs to the festival are $.25 for wristbands, $.90 for tasting glasses and $.15 for non-alcoholic drinks. All drink tickets are expected to be used. What is the sales budget for the May festival?

$1,187,500

A company expects to sell 2,500 units at $7 unit during the first quarter. The company expects to collect 70% of the sales during the quarter they are sold and the balance in the next quarter. Collections in the first quarter are expected to be

$12,250

The Whitewater Wine Foundation hosts 3 festivals per year. The May festival is predicting 125,000 attendees and a total of 150 labor hours. Incidental costs related to the workers are budgeted at $1.75 per direct labor hour. Other budgeted costs for the May festival are $50,000 for liability insurance, $3,500 in advertising, $10,000 for grounds rental and $2,000 for tents.

$13,725.00

Whitewater Wine Foundation expects 125,000 attendees at their May festival. Wine-tasters pay a $10 entrance fee which includes a tasting glass and wine-tasting wristband. Designated drivers pay a $5 entrance fee and receive a ticket for one non-alcoholic drink. Of the attendees, 10% are expected to be designated drivers. Costs to the festival are $.25 for wristbands, $.90 for tasting glasses and $.15 for non-alcoholic drinks. All drink tickets are expected to be used. What is the total purchases budget for the May festival?

$131,250

A group of film students is hosting a preview of the horror films they created for their film class with the hope that they can sell copies of their films to help underwrite their next film. They expect that their showings to result in 3,200 students buying an average of 2 films each. Films copies will only be made based upon orders and the copying costs per film is $2.75. What is the purchases budget based upon their estimated sales?

$17,600

A company expects to sell 2,500 units at $7 unit during the first quarter and expects sales to increase by 10% each quarter. What is the total budgeted sales revenue for the 2nd quarter?

$19,250

The Whitewater Wine Foundation hosts 3 festivals per year. The May festival is predicting total attendance at 125,000 people. The festival will last 3 days and be open 10 hours per day. The festival will need 4 ticket sellers on hand at all times who will be paid $18/hour. In addition, during peak times, approximately 5 hours per day, 2 parking attendants will be needed. They will be paid $12/hour. Direct labor cost for the May festival will be ______.

$2,520

Interest is earned at a 6% annual rate on the average cash balance for the quarter. What interest will be earned for 1st quarter given the following budgeted information? (round to the nearest whole $)

$2,815

A group of film students is hosting a preview of the horror films they created for their film class with the hope that they can sell copies of their films to help underwrite their next film. They expect that their showings to result in 3,200 students buying an average of 2 films each. Films copies will only be made based upon orders and the copying costs per film is $2.75. The copying time per film is 15 minutes and the person making the copies is paid $12.50 per hour. What is the direct labor budget based upon their estimated sales?

$20,000

Casa, Inc. is projecting the following unit sales per quarter, however, they plan to increase their $5 per unit sales price by 20% in the 3rd quarter, the beginning of their busy season. Calculate their budgeted sales revenue for the year.

$294,750

Casa, Inc. is projecting the following sales per quarter. Based upon past experience, the company expects to collect 40% in the quarter of sale and the remaining balance in the next quarter. Calculate the expected cash receipts for the 2nd quarter.

$54,480

The Whitewater Wine Foundation hosts 3 festivals per year. The May festival is predicting 125,000 attendees and a total of 150 labor hours. Incidental costs related to the workers (sunscreen and water) are budgeted at $1.75 per direct labor hour. Other budgeted costs for the May festival are $50,000 for liability insurance, $3,500 in advertising, $10,000 for grounds rental and $2,000 for tents.

$62,262.50

Which of the following statements about a master budget are not true?

-Budget schedules are independent. -Budgets cannot use activity-based costing.

Major factors in sales forecasting include ______.

-advertising and product promotions -political events -past sales levels -economic climate -expected actions of competitors -past sales levels -general economic trends -industry economic trends

The problem of budgetary slack can be solved by ______.

-basing budget cuts on reviews of spending justifications -providing incentives for accurate projections -allowing some managerial discretion to exceed the budget

The units on the production budget are not always equal to the sales budget due to ______.

-companies building inventory in an effort to smooth production levels -difficulty in predicting sales -timing differences between production and when sales can occur

Which of the following are not selling, general and administrative expenses?

-cost of employees directly providing the service the company is selling -purchases -depreciation on factory building

A budget is used for ______.

-facilitating communication and coordination -allocating resources -controlling profit and operations -planning -evaluating performance and providing incentives for employees

The cash flow budget reflects ______.

-proceeds from the sale of fixed assets -cash inflows from other sources -cash inflow from customers -cash outflows for merchandise purchases -repayments of loans

Budgeting differences between service and manufacturing firms are found primarily on the ______ budgets.

-production -direct-materials

A budget ______.

-serves as a useful benchmark for comparing actual results -can help managers evaluate firm effectiveness -serves both a planning and control purpose

Reasons managers might pad their budgets include ______.

-the desire to meet projections in order to receive their incentive pay -to provide a cushion in the event of an unexpected cost -to ensure that after cuts, there is still sufficient resources to meet organizational goals

Animas Manufacturing expects sales of 5,200 units in January and anticipates a beginning inventory of 260 units. If they wish to have 700 units in inventory at the end of January, how many units will they need to produce in January?

5,640

Animas Manufacturing expects to produce 7,000 units in January, 6,400 units in February and 6,800 units in March. Each unit requires 3/4 of a pound (lb) of materials at a cost of $24/lb. Animas anticipates a beginning raw materials inventory for January of 525 lbs. Company policy is to have 10% of next month's materials in ending inventory. What is the budgeted ending raw materials inventory for February?

510 lbs

Difference between a provided estimate and a realistic estimate is called

Blank 1: budgetary Blank 2: slack

Because it depends on the spending plans reflected in several operational budgets, the budget is quite complex. (Enter only one word per blank.)

Blank 1: cash Blank 2: disbursements or disbursement

Intentionally underestimating revenue or overestimating costs is called

Blank 1: padding Blank 2: budget

The key types of master budgets schedules are

Blank 1: sales Blank 2: operational Blank 3: financing

Which of the following is NOT an example of budgetary slack?

Submitting an estimate for salary increases of 2% when the union is requesting a 3% increase.

The linkage between planned production and raw material purchases is _____ in manufacturing firms.

a critical linkage

Ending budgeted balance sheet account amounts equal ______.

account balances at beginning of the year, plus or minus expected changes in account balances during budget period

The final step in the budgeting process is the preparation of the budgeted ______.

balance sheet

For any organization to be effective, each manager throughout the organization must ______ other managers.

be aware of the plans made by

Awarding bonuses is a component of the ______ part of budgeting.

evaluating performance and providing incentives

Comparing actual results to budgeted results to reward achievements is part of ______.

evaluating performance and providing incentives

A budget that shows cash shortfalls and surpluses is a(n) ______ budget.

financing

Budgets that project cash flow and identify likely cash shortfalls and surpluses are___budgets.

financing

In a manufacturing firms, units to be produced is calculated as budgeted sales + desired ______.

finished goods ending inventory - expected beginning finished goods inventory

Sales forecasting ______.

impacts other budgeting components

All of the information on the budgeted income statement comes from other schedules except budgeted ______.

income taxes

A budget for a period that is in excess of a year is called a ______ budget.

long-range

A comprehensive set of budgets covering all phases of an organization's operations for a specific period of time is called a ______ budget.

master

Ending inventory is generally based on materials needed for ______.

next period's production

Budgets that specify how activities will be carried out to meet sales demands are called ______ budgets.

operational

Cash disbursements budgets are based on ______ budgets.

operational

Inventory budgets are ______ budgets.

operational

A financing budget shows a ______.

plan that shows how the organization will acquire financial resources

The starting point in the sales forecasting process is generally ______.

prior year sales levels

A merchandising firm does not prepare a ______ budget.

production

The direct materials and direct labor budgets are based upon the ______ budget.

production

The starting point for the direct materials purchases budget is the _______ budget.

production

Other costs of production, besides purchases and direct labor, are called ______.

production overhead costs

The order of budget preparation in nonprofit organizations is generally ______.

program budgets and then funding sources

Allocating resources is the process of ______.

providing for the needs of competing uses of revenues

The direct-material budget show the number of units and cost of materials to be ______.

purchased and used

The most obvious purpose of a budget is to ______.

quantify a plan of action

A plan that is continuously updated by adding a new time period and dropping the period just completed is a ______ budget.

revolving

The first budget created in the budgeting process is the___budget.

sales

The production budget is based upon the ______ budget.

sales

Budget preparation should begin with the ______ budget.

sales of services or goods

The cash receipts budget can differ from the sales budget due to the fact that ______.

sales on account and cash collections may occur in different periods

Budgets that cover a month, quarter or year are considered ______ budgets.

short-range

Conversion costs are the costs of ______.

the resources needed to convert purchased inputs into a marketable product or service

The main difference in budgeting for service industries vs. manufacturing industries is ______ in service industries.

the revenue source

For most manufacturers direct materials is a ______-level cost.

unit

Which of the following would not be considered in sales forecasting for the upcoming year?

who to hire as the manager of research and development